Beef, pork prices in the US seen to rise

While a weak US dollar is seen to increase beef and pork exports next year, it will also cause domestic supplies to decline and ultimately lead to rising prices in the US, according to executives at Tyson Foods, who spoke with analysts during the company's fourth-quarter earnings call last week.

Jim Lochner, Tyson's chief operating officer said domestic availability of protein in beef and pork are going forward unless there's a major trend. That's one reason that total supplies are being monitored and look at the domestic availability shrinking throughout even though per-capita consumption [in the US] will come down, he said, adding "it will be favourable to push pricing."

Like its competitors, Tyson, the world's largest meat processor, has faced significant challenges during the past two years. In 2008, prices for animal feed and fuel soared due to factors including the ethanol boom and a speculative bubble in the commodity markets. In 2009, those input costs retreated from record highs, but sluggish export markets and a slump in demand from the US restaurant industry helped hold protein prices down.

Average prices for most meat and poultry cuts have slowly declined since the beginning of the year, according to data from the US Department of Agriculture's Economic Research Service. But, Tyson's beef, chicken and pork divisions each delivered operating profits during the fourth quarter, due primarily to volume sales increases.